Best Buy 2005 Annual Report Download - page 92

$ in millions, except per share amounts
ultimately vest. If a plan participant’s relationship with us
were to be terminated, all shares still subject to restrictions
are forfeited and returned to the plan.
The following table presents the restricted shares issued, and their related weighted average fair values, for each of the
past three fiscal years:
2005 2004 2003
Restricted shares issued (millions) 0.9 1.1 0.1
Weighted average fair value of issued restricted stock $55.09 $57.65 $51.27
Compensation expense recognized for all restricted shares per share calculation the potentially dilutive shares
outstanding was $(1.4), $7.9 and $2.4 in fiscal 2005, issuable as if our convertible debentures due in 2022 had
2004, and 2003, respectively. Fiscal 2005 expense been converted into shares of our common stock. In
accordance with EITF Issue No. 04-08, we have restated
reflects a change in vesting assumptions based on our
total shareholder return relative to the performance of the prior periods. The effect of adopting EITF Issue No. 04-08
reduced earnings per share from continuing operations by
S&P 500 and an increase in our expected forfeiture rate.
$0.03, $0.03 and $0.01 for fiscal 2005, 2004 and
Employee Stock Purchase Plan 2003, respectively.
Our shareholders approved the Best Buy Co., Inc. 2003 Basic earnings per share is computed based on the
Employee Stock Purchase Plan (ESPP) at our 2003 Regular weighted average number of common shares outstanding.
Meeting of Shareholders. Five million shares have been Diluted earnings per share is computed based on the
reserved for issuance under the ESPP. The ESPP is weighted average number of common shares outstanding
intended to qualify as an employee stock purchase plan adjusted by the number of additional shares that would
under Section 423 of the Internal Revenue Code of 1986, have been outstanding had the potentially dilutive
as amended. The ESPP permits employees to purchase common shares been issued. Potentially dilutive shares of
shares of our common stock during semi-annual purchase common stock include stock options, unvested restricted
periods beginning on the first Friday of April and October stock awards, shares issuable under our ESPP as well as
of each year. The shares are purchased at a price equal common shares that would have resulted from the
assumed conversion of our convertible debentures (see
to the lesser of 85% of the fair market value of the
common stock, as measured by the closing price on the Note 4, Debt). Since the potentially dilutive shares related
to the convertible debentures are included in the
New York Stock Exchange, at the beginning or at the end
calculation, the related interest, net of tax, is added back
of the purchase period. In fiscal 2005, 823,000 shares
to income from continuing operations, as the interest
were issued under the ESPP. No shares of common
would not have been paid if the convertible debentures
stock were issued under the ESPP in fiscal 2004, since the
were converted to common stock.
initial purchase period ended on April 1, 2004. As of
February 26, 2005, and February 28, 2004, ESPP The computation of dilutive shares outstanding excluded
participants had accumulated approximately $13 and options to purchase 6.3 million, 15.9 million and
$18, respectively, to purchase our common stock. 24.6 million shares as of February 26, 2005;
February 28, 2004; and March 1, 2003, respectively,
Earnings per Share because such outstanding options’ exercise prices were
We adopted EITF Issue No. 04-08, The Effect of greater than the average market price of our common
Contingently Convertible Instruments on Diluted Earnings shares and, therefore, the effect would be antidilutive (i.e.,
per Share, in the fourth quarter of fiscal 2005. EITF Issue including such options would result in higher earnings per
No. 04-08 requires us to include in our diluted earnings share).
76